Remakes of properties, work on Resorts World expected to enliven Las Vegas Strip in ‘14

Remakes of properties, work on Resorts World expected to enliven Las Vegas Strip in ‘14

The stalled Echelon Place construction site and former Stardust site is seen Dec. 2, 2013. Malaysia-based Genting Group bought the 87-acre develop­ment from Boyd Gaming Corp earlier this year and plans to build a $2 billion hotel-casino complex. (Jeff Scheid/Las Vegas Review-Journal)

Remakes of properties, work on Resorts World expected to enliven Las Vegas Strip in ‘14

Malaysia-based Genting Group bought the stalled Echelon Place construction site on the former Stardust site from Boyd Gaming Corp earlier this year and plans to build a $2 billion hotel-casino complex. (Jeff Scheid/Las Vegas Review-Journal)

Remakes of properties, work on Resorts World expected to enliven Las Vegas Strip in ‘14

Remakes of properties, work on Resorts World expected to enliven Las Vegas Strip in ‘14

The stalled Echelon Place construction site and former Stardust hotel/casino site is seen Monday on Dec. 2. Malaysia-based Genting Group bought the 87-acre develop­ment from Boyd Gaming Corp. earlier this year and plans to build a $2 billion hotel-casino complex. (Jeff Scheid/Las Vegas Review-Journal)

By HOWARD STUTZLAS VEGAS BUSINESS PRESS

The biggest gaming story of 2014 might be a 2016 or a 2017 event.

Malaysia-based Genting Group is expected to begin construction sometime in 2014 on the $2 billion-to-$7 billion Resorts World Las Vegas, returning construction activity to the 87-acre Echelon site that has sat dormant for almost five years.

It will take at least two to three years to complete the 3,500-room Resorts World, which would become the Strip’s first new megaresort opening since the 2010 unveiling of The Cosmopolitan of Las Vegas.

It’s unclear, however, when work might begin.

Since the company’s over-the-top project announcement last March — which included appearances by Gov. Brian Sandoval and Senate Majority Leader Harry Reid on a conference call — Genting has gone radio-silent. The company bought the Echelon acreage and unfinished buildings from Boyd Gaming Corp. for $350 million and unveiled elaborate designs for the project.

Company representatives declined to comment for this story.

Gaming analysts weren’t concerned.

Most believe the company is proceeding with development plans, site approvals and gaming regulatory background checks. Genting, which has a market capitalization of $38 billion, will announce the next steps for Resorts World on its own timetable.

“None of us have really heard much,” Credit Suisse gaming analyst Joel Simkins said. “We know they are pressing forward. We have an analyst in Malaysia who said the company is kind of a black box when it comes to information.”

Any smattering of news emanating from Resorts World, however, would be a welcome sign for Las Vegas.

“The Genting folks take a longer-term view of their investments,” Farrell said. “They are not in any rush.”

rebounding slowly

That’s not to say the Strip will be quiet in 2014.

Following the recession, the Las Vegas gaming market has made a small and steady comeback. Gaming revenues, which increased 1.5 percent to $10.86 billion in 2012, were up 2.4 percent through October. Las Vegas may fall short of its goal to top 40 million visitors in 2013. Through October, Las Vegas attracted 33.5 million visitors, down 0.3 percent compared with the same 10 months of 2012.

Looking ahead, analysts see positive trends. The convention business appears promising for the first half of 2014, with several large conventions and trade shows already booked. High-end Asian baccarat business shows no signs of slowing.

“Corporate America is sending people to Las Vegas,” Simkins said. “That end of the business is quite healthy.”

Farrell said the middle-market traveler, who scaled back trips in 2013, may return as 2014 moves forward.

“There also continues to be international demand for Las Vegas,” Farrell said.

Resorts World aside, Las Vegas will see a mix of renovated hotel-casinos and new nongaming amenities and attractions unveiled during 2014.

Two hotel-casinos are expected to reopen: the $415 million SLS Las Vegas, formerly the Sahara, and the $180 million yet-to-be-renamed Bill’s Gamblin’ Hall. Both buildings are undergoing extensive renovations.

Before the new hotel-casinos are added, the Strip will see two new entertainment, dining and retail districts: The $550 million Linq, which includes the 550-foot High Roller observation wheel, and a $100 million outdoor plaza being developed between New York-New York and Monte Carlo, that includes a 150,000-square-foot Hershey’s Chocolate World.

Earlier this month, Bally’s announced plans for the $50 million Grand Bazaar Shops to be built in the area near the corner of the Strip and Flamingo Road.

All three developments are expected to open in 2014.

attractions beyond the casino

Simkins said nongaming offerings, such as the trendy restaurants, bars, clubs and retail being added to the Strip, clearly aim to give customers something else to do other than gaming.

“It’s representative of the trend acknowledged in the gaming industry,” Simkins said. “Regional gaming markets have matured and Las Vegas needs to find additional ways to capture the consumer.”

Both Linq, which is being developed by Caesars Entertainment Corp., and the MGM Resorts International project between New York-New York and Monte Carlo, give Strip visitors dining and entertainment options they can’t find in hotels.

MGM Resorts Chairman Jim Murren said this year that the company’s project, which will serve as the gateway to a planned $350 million sports and entertainment arena that will open in 2016, creates “an energy that you find in the world’s great cities.”

Murren said Las Vegas visitors no longer want to be tied to a single hotel-casino.

“That visitor wants to move around and be social,” Murren said.

The Linq’s High Roller figures to grab its own headlines. The observation wheel, with 28 passenger cabins, will be the tallest attraction of its kind in the world, taller than the London Eye or the Singapore Flyer. It is expected to open by summer.

a highly anticipated opening

As for resort development, the planned September 2014 opening of SLS has been much anticipated since the 59-year-old Sahara was closed in 2011. SBE Entertainment secured the final piece of financing for the property in early 2012 and began construction before the end of the year.

The building has been gutted. The new hotel-casino will have 1,600 rooms and a 60,000-square-foot casino with 80 table games and 800 slot machines.

The property’s key features are restaurants and nightclubs operated by SBE, all of which are new to the market. Los Angeles-based SBE runs more than 60 culinary establishments in Southern California and has SLS-branded hotels in Los Angeles, New York and Miami.

Analysts said SLS’ underlying focus will be turning those nightclub customers into casino patrons.

“We’re big fans of the SLS product,” Farrell said. “How many customers will increase their length of stay is the question.”

Caesars’ redevelopment of Bill’s hit a roadblock in October, when the company’s branding partner, Gansevoort Hotel Group of New York, was forced out of the project. Massachusetts gaming investigators, looking at Caesars’ licensing application for a Boston-area casino, found an investor in Gansevoort with alleged ties to Russian organized crime.

Caesars dumped Gansevoort, but the redevelopment is proceeding as Caesars seeks a new naming partner. The project is expected to open toward the end of 2014.

Meanwhile, the gaming market awaits Resorts World Las Vegas. One question still being asked is whether the Genting folks can pry a pair of pandas from China for display at the Strip resort, as was hinted in March.

“The beauty of Genting is that they have a lower return-on-investment threshold than most other gaming companies,” Simkins said. “They are in it for the long haul.”

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